Thursday, January 30, 2014

Competition in Mobile Phones: What Does Google's Sale of Moto Mobility Mean?

As I look at my trusty Samsung slider dumbphone by my side, I don't have an emotional stake in the smartphone market, but I have to say I don't think it looks good for consumer choice in U.S. markets.

Google buys Motorola Mobility for $12.5 billion, and it was widely understood that Moto's rich patent portfolio was a significant asset for building out Android as a mobile operating system alternative to iOS.
In the meantime, Google launched the Nexus line of smartphones, with its partner HTC,  to widespread consumer praise, and it sold out from Google's own website as soon as it was back in-stock.

This was clearly very encouraging to U.S. retail consumers who felt that they could get a clean version of the Android OS that they preferred to the versions licensed to vendors who put their own bloatware and undesired features on them.  Presumably, by getting a Google Nexus phone, a consumer would be assured first updates to Android, e.g. Cup Cake to Donut to Kit Kat.

The Nexus also featured unlocked phones at significantly lower prices to Apple and to most other comparable Android phones.  Finally, Motorola released the MOTO-X which, despite some snitty tech reviews, seems to be a raging favorite with the younger, Facebook crowd.  Everything is pointing towards a successful, robust alternative to Apple.  Windows Phone, if it ever gets there, would be a third alternative.

Now, without claiming to be an expert, it all looks a confusing, cloudy outlook both for U.S. consumers and for Google partners, like HTC and Samsung.  HTC seems like it has been hung out to dry by the announced sale of Motorola Mobility to Lenovo. Quite a few users I've seen like HTC phones, either unlocked or subsidized, on all the carriers.  It seems like their future as an alternative, innovative marketer of smartphones is in real jeopardy.

What about Samsung?  Although its phones are popular and highly regarded by business consumers, they also complain about the workings of Samsung's customizations to Android, which Samsung needs to make if they are to create a unique customer experience with the phone's customer interface.  If they customize further, it really creates problems for them.  They surely have the technical horsepower to innovate, but can they continue to do so?

What of Lenovo? Yes, they've done a nice job with the old IBM Think Pad line, but they did it by leaving a lot of the customer facing features the same, like the feel of that keyboard.  Can they really be a factor in the fickle U.S. smartphone market?  I don't know.

If Android loses share because the former Google partner base has been sprayed with pesticide, where do consumers go?  An overpriced Apple?

If Microsoft could ever pull it together with Nokia and speak to all the U.S. customer segments in smartphone, they could really have a tiger by the tail.  The jury is out on this one.

In the meantime, Google and Apple won't be suing each other, but they could both be suing's not a great day for U.S. smartphone consumers.

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